2 ARE AMERICANS AS CULTURED AS EUROPEANS? Old Print of a House in Washington Square How four young men from Washington Square, New York, By ROBERT JENNINGS STANLEY This is a story of a unique experiment, one of the most interesting in the literary annals of this country. The book-world has watched it, first with curiosity tempered with amusement, and lately with genuine amazement. About a year ago, four young men, hardly more than boys, sat about in the Washington Square Bookshop, one of the show-places of the artistic and literary colony of New York. Many a unique enterprise had been fathered in this quaint place. A few days before, another group of young people had, in the same place, decided to organize the Washington Square Players, and were soon to startle New York with the most unusual plays seen on Broadway in many years. These four young men, however, were not interested in the theater. They were interested in books. None of them had any money. But one of them had an idea. He held in his hand a small edition of an English classic. "Before the war," he said, "books like this sold by the million in England, Germany and France. People read them in public, just as Americans read newspapers and magazines. From this a casual observer might infer that Europeans possess a higher culture. I don't believe it. I believe the standard of culture is as high here as abroad. What Americans Read and Why "Americans read so many newspapers and magazines because they may be obtained more easily than other reading. No matter where a man is, he can secure his favorite periodical, but not his favorite book. I believe that if the great masterpieces of literature could be obtained as easily as newspapers, many more people would read them. Think of the time we Americans waste reading profitless matter in newspapers. Most of us, too, know that a great deal of such reading is profitless. We would rather read worth-while books, but we cannot buy them on a news-stand and we cannot carry large library volumes around with us. Make the masterpieces of literature more easily obtainable and really handy to carry, and you can't tell me that the average American will not prefer the better reading." Other Publishers Say It Can't Between them, these four young men raised enough money to publish one book. They showed this to department stores, and within a week had evidence that they had struck a popular vein. They then managed to raise enough capital to publish fifteen books, and the enterprise was definitely launched. Their books were compact and well printed, and were bound in ooze-sheep leather. In size, they were smaller than the usual misnamed pocket-size volume, which is usually too large for a pocket. More remarkable than the quality was the price at which the books were offered. Publishers are usually forced to add several hundred per cent profit, in order to cover their selling costs. These young men cut their profit to a smaller margin than perhaps books had ever before been marketed on, believing that a low price would so increase the volume of business as to make the venture self-sustaining. Because of this, other publishers predicted disaster for the enterprise at once. Even to-day, some of the oldest American publishers declare that they do not see how genuine limp-leather volumes like these can be sold at so low a price. Selling a Million Books a Year Immediately upon their appearance, the demand for the books was so extraordinary that it could not be met. Department stores swamped the little business with orders for thousands of books, in some cases tens of thousands. Letters from readers poured in, inquiring when new titles would be issued, and within three months it was necessary to publish fifteen new books. This only increased the demand. Requests for new titles became so insistent that three months afterward thirty new books were published, making sixty titles in all. Of these sixty volumes, close to one million copies were sold in little over a year. To-day it is a common thing in New York to see business men and women traveling on the subways or on trains to and from the suburbs, reading these little masterpieces, instead of newspapers. The judgment of the young publishers was justified. The masters who have inspired and charmed millions in the past still hold their own with the present-day best-sellers. The American public wants good books. It will read them more eagerly than it reads mediocre fiction. What the Book-Lover Wants Without doubt the success of the Little Leather Library, the name given to this series, has been due chiefly to the selection of titles. Some educational authorities acclaim it as the most excellent collection of masterpieces ever issued in so compact a form. Every one of them is complete and unabridged. They include not only the best work of the old masters, but the finest writing of many modern authors-English, French, Russian, American. They are works that a book-lover wants to have about him always, to read in spare moments during travel, or at home in the evening when nothing can quite so satisfy as an hour with a good poem, story, drama, or essay. The library now includes works of such authors as these: G. Bernard Shaw Elizabeth Browning Harte, Lanier, Ed- Rudyard Kipling Shakespeare Walt Whitman An Anthology of English verse, including the best poems of Michael Drayton, Shakespeare, Ben Jonson, Robt. Herrick, Milton, Collins, Blake, Wordsworth, Coleridge, Lamb, Moore, Byron, Shelley, Keats, Thos. Gray, Hood, Arnold, Tennyson, Browning, Rossetti,Swinburne, and others. Complete Set Shipped Free for Examination The publishers of the Little Leather Library have such confidence in the desire of the public to possess works of this character, and also in the ability of the public to discern unusual book values, that they ship free the complete set of sixty volumes to any person, for five days' examination. They do not require the payment of any money in advance. If the books do not meet the expectation of the buyer, they may be returned within five days after delivery. With each set of sixty books, a handsome mahogany or quartered oak bookrack is given free. This is attractive enough to ornament any library table. The publishers are perfectly willing to stand the expense of shipping charges to points within the United States, to anyone desirous of seeing these books. If they are not wanted when they are seen, not the slightest hesitation may be felt in sending them back, within the time allowed for examination. It is only necessary to send your simple request to the Little Leather Library, 81 Mercantile Bldg., 23d St., New York, or for convenience, use the blank form below.-Adv. Name.... Address.. Little Leather Library, 81 Mercantile Bldg., 23d St., New York Please send me the 60 Leather-Bound Books, prepaid. I will return them in 5 days or pay you $1 down, and 83 a month for 6 months, making $19 in all. For Canada and foreign countries, price is FINANCIAL DEPARTMENT All legitimate questions from Outlook readers about investment securities will be answered either by personal letter or in these pages. The Outlook cannot, of course, undertake to guarantee against loss resulting from any specific investment. Therefore it will not advise the purchase of any specific security. But it will give to inquirers facts of record or information resulting from expert investigation, leaving the responsibility for final decision to the investor. And it will admit to its pages only those financial advertisements which after thorough expert scrutiny are believed to be worthy of confidence. All letters of inquiry regarding investment securities should be addressed to THE OUTLOOK FINANCIAL DEPARTMENT, 381 Fourth Avenue, New York ESTABLISHED 1865 |||| THE STRENGTH OF THE FARM MORTGAGE T THE Eastern investor, accustomed to look at farming from an Eastern point of view, scarcely conceives of the magnitude of the farm mortgage business or of the groundwork on which it has been built. No organized effort to approach Eastern investors is made by the farm mortgage companies. Possibly the farm mortgage does not need to go so far to find its friends. The majority of investors who buy bonds and stocks do not know how to approach the farm mortgage from an investment angle. Yet there are two billion dollars invested in farm loans in the United States. The insurance companies alone hold seven hundred millions. Savings banks and estates are large holders. Then there is the occasional individual investor, very often the one farm mortgage buyer in his community. These institutions and these occasional investors demand safety of the highest order as a fundamental principle. They are content with five or six per cent and a security in which values do not fluctuate. First mortgages on farms meet with these essential requirements of conservative invest ment. The census estimate places the value of our farms at thirty-five thousand millions, against which there are two thousand millions of loans outstanding. Most of these loans are made to the amount of less than half the value of the individual farms on which they are a lien. THE PRECEDENT OF SAFETY The custom and practice of the farm mortgage bankers in the pursuit of sound and safe investments have been largely determined by the fact that buyers of this form of investment have set but one standard. That standard has made necessary the establishment of high-grade banking organizations equipped to send men into plowed field and open meadow for the purpose of ascertaining the value of every acre on which a dollar is to be borrowed. When farm mortgage men speak of "territory" or "loaning field," they invariably have in mind basins and valleys, the soil, rainfall, and agronomy of a certain district, and they speak with authority based on actual contact and close study of a restricted area. In this they know the values to an exact figure. As one bond house knows its own bonds and another those in which it deals, so the farm mortgage banker knows of that loan which he recommends, not theoretically, but through investigation of the actual farm. This definite knowing is the essential part of the business. It is the part that requires the work of the main body of the organization. The selling of the loans to investors is a matter which takes care of itself. At this moment the complaint is that there are not enough mortgages to meet the requirements of a regular clientele, to say nothing of new business. COMPARISON WITH FOREIGN LOANS This condition contrasts strongly with the situation in foreign loans. About two billions in foreign government securities have been placed in the United States. This just about corresponds with the total amount of outstanding farm mortgages. Yet while farm mortgages are unavailable, the government bonds of England, France, Russia, Japan, and the Argentine are sell INDIVIDUAL INDEPENDENCE OF FARM In the course of the discussion on the possible railway strike there have been made public some interesting figures as to how such a strike would affect vitally the interests of the man who holds a life insurance policy or who has a savings bank deposit. The assets of savings banks and life insurance companies largely consist of bonds and mortgages. The mortgages are giving our great financial institutions little concern. Each mortgage represents actual control of the security. The mortgage papers give the mortgagee the right to foreclose in default of payment either of interest or principal. But the defaulted bond invariably means a reorganization committee, a readjustment of capital and debt, and sometimes expensive litigation in the recovery of rights. As an answer to the more favorable light thrown on the farm mortgage in this comparison, it might be said that any foreclosure proceedings involve legal expense, and that the security-holder is subject to these expenses in either case. The truth of such an assertion cannot be denied. But it is a point of pride with farm mortgage bankers to look after these matters at their own cost, and not only to protect the investor as to his security, but to save him the payment of all legal fees. The safest mortgage in the world might default, and in such a case the farm mortgage banker would not so much consider its failure a reflection on his judgment as he would a loss of interest or principal to his client a reflection on his integrity and good faith. Furthermore, mortgages are sold in some cases on the understanding that if during the course of a year the investor finds some aspect of the situation unsatisfactory, the original purchase may be replaced with another mortgage to meet the requirements. Considering these provisions for the protection of the investor, and adding the service rendered by a farm mortgage banker in the examination of titles, the collection and remittance of interest, the supervision of insurance, and the responsibility for the payment of taxes, it is obvious that the investor receives a quota of investment value obtainable in few, if any, securities. GOVERNMENT COMPETITION No small expectations are entertained by some investors as to the desirability of the new Federal Farm Land Debenture bonds, to be issued as instrumentalities of the United States Government under the Federal Farm Loan Act. These bonds are to be secured by deposit with one of twelve district banks of farm mortgages negotiated under Government supervision. The conclusion of farm mortgage bankers on the effect of this competition is that it will not change the custom and practice of the mortgage business in the old-established farming districts, but it will provide capital for those sections where money is scarce and interest ESTABLISHED 1865 ||||||||||: ESTABLISHED 1865 ||||| Investment Service FOR fifty-one years PEABODY, HOUGHTELING & Co. have carefully adhered to the principles of conservative investments. This cumulative experience in successful investment banking, combined with an efficient organization of trained experts, insures you a most dependable, specialized Investment Service. When dealing through this firm you procure an investment which has undergone an exhaustive investigation, has been purchased outright by us before being offered to you, and which is safeguarded in every possible way. It will be our pleasure to send you a list of Choice First Mortgage Securities upon established profitable properties, for long or short terms, in $1,000, $500 or $100 amounts, yielding 5% to 6%. This company welcomes Peabody, Houghteling & Co. (ESTABLISHED 1865) 10 South La Salle St. Chicago ESTABLISHED 1865 ||||| Follow the Trend The Trend of investors to public utility bonds is based on the nation-wide growth of utilities-due to the enormous increase in population which has amounted to over 100% in 35 years. Peace and the business of Public Utility Companies are strongly associated with public welfare. Even in the past year, their earnings have shown a marked increase, due both to the increase in population and the upturn of business. The Premier Peace Investment-which has also stood War tests-is to be found in the bonds of Companies supplying Light Heat and Power Public Utility Companies are showing remarkable progress and their bonds form a safe investment for the future. We recommend the bonds of the Ohio Utilities Company and will be glad to send our illustrated booklet 24 on request. P. W. BROOKS & CO The Strength of the Farm Mortgage (Continued) rates are high. In other words, the Government's business will not be competitive in any strict sense, but will rather supplement the farm mortgage banking business, in that it will meet requirements in new territory where the farm mortgage banker does not feel that he can safely lend. While there may be some Federal Farm Land Debenture bonds issued in 1917, they will hardly be a factor in the farm mortgage market. How slow Government plans are in getting under way is indicated in the operations of the Land Bank of New York State. This bank has been established for several years, and has issued two or three small blocks of bonds. Yet the bond men in New York who know anything about the matter are few and far between. This is a commentary, not on their intelligence, but rather on the obscurity of the Land Bank of the State of New York. The above is, however, a poor criterion. In New York they know too little of the great resources of the West, and they hesitate to proceed with their farm financing with intrepid and certain prospect of success. When the Government of the United States enters the farm mortgage business with $9,000,000, many unheard-of fields will be opened up. The significance of the thing is that every one has realized, even the politician, that the farms of the American continent contribute the major part of our National wealth, an amount in dollars exceeding beyond question either the proceeds or the value of service rendered in any other industry. It is not cheaper farm money but more farm money that can be utilized to advantage. The strength of the mortgage itself, under the supervision of the Government, certainly should be determined by the practices which have made the old-fashioned loan such a remarkably safe and satisfactory investment. QUESTIONS AND ANSWERS Q. If consistent, would be pleased if you can give me information regarding the Pacific Gas and Electric Company 6 per cent accumulative preferred stock, and would like an expression as to its being an investment suitable for women to hold for the income. It is now selling for about 94. For a good many years I have been a subscriber to The Outlook, and I think this is the first time that I have ever made a request of this character. A. The Pacific Gas and Electric Company 6 per cent preferred is, in our judg ment, reasonably certain, under normal conditions, to continue dividends at the present rate. The company itself owns its properties in fee, takes proper care of its maintenance and depreciation items, and appears to be in sound financial condition. You understand, of course, that an investment in a preferred stock of this character would not be as conservative, all things considered, as an investment in the company's General and Refunding 5 per cent bonds. These bonds are secured by a direct lien on the properties, on which foreclosure proceedings can be instituted should any default occur either in principal or interest. If, however, dividends should be suspended on the preferred stock, the holder would have no recourse, for the reason that a stockholder must expect to share in the losses of the company just as he hopes to participate in the profits, when there are Mark Farm Mortgage Bankers 1226 First National Bank Bldg. MILWAUKEE, WIS. Central Pacific First Refunding 4s. West Shore First 4s. Chicago, Rock Island, and Pacific General 4s. In your consideration of these railway bonds you must appreciate that you are paying not only for a high degree of safety but a high degree of marketability as well. All of the above railway issues are listed on the New York Stock Exchange and are actively traded in from day to day. As a result of this factor of marketability you would obtain from an investment in these railway issues a net return considerably less than the return which you might expect from securities in which the factor of marketability is either negligible or in which it lies exclusively with the house of issue. Q. I would be pleased to have you give me your opinion of the United Light and Railways Company 6 per cent notes, a holding company having gas and electric plants and street railways in Davenport, Iowa; Moline and Rock Island, Illinois; Chattanooga, Grand Rapids, and other places in the Central West. They are secured by first and refunding 5 per cent bonds of the same company at the ratio of about 75 per cent bonds to 100 notes. They have, however, many underlying issues of bonds and stocks, and their business is hard to understand in regard to the securities they have out. A. The United Light and Railways Company 6 per cent notes, maturing in 1918 and 1920, are, in our judgment, safe and conservative. These notes enjoy a good market in New York around 101 and interest, and the First and Refunding 5 per cent bonds, which are deposited to secure the notes, are now selling around 90 and interest. A block of these bonds was originally sold to the public in 1911 at 92% and interest. An issue of $1,500,000 6 per cent Debentures has only recently been offered at 99 and interest. These Debentures are convertible into stock, and are in all respects junior to the Trust and Refunding 5 per cent bonds. All the securities of the United Light and Railways Company are well regarded. While we are, as a rule, very careful about recommending the securities of holding companies, we do not believe that you would make a mistake in investing in the note issue concerning which you make inquiry. Free Booklets for Investors The present era of prosperity has brought a steadily increasing number of investors and a country-wide campaign of thrift. The leading investment bankers are publishing booklets and literature which are full of information to prospective investors. The following is a selected list of booklets which may be obtained by writing the “A NEW PLAN BY OLD INTERESTS.” A Method of Distributing among Moderate Important Profits of Legitimate Timber Many of the most substantial fortunes of today are rooted in timber investments of past years. The similar opportunities of today are less frequent, but when they do occur they are as remarkable as they are unusual. They are sure to be due to some unforeseen concurrence of events which force the owner of timber of the highest potential value to sacrifice his holdings for ready cash. It is usual for owners in such cases to present their needs to the James D. Lacey Timber Co., who are thereby enabled by their resources and prestige not only to relieve with cash the needs of the seller (on whatsoever scale) but also to thus acquire for the profit of their clients various tracts and timber rights at figures below their value. Our appraisal of such forced offerings is rendered prompt and accurate by reference to the International Timber Record Files of James D. Lacey & Co., which have been the standard basis of determination of timber values among most large banks for years. Our facilities for re-sale of the timber, at attractive profits, are unequaled. At the suggestion of many minor investors we have arranged a MOST INTERESTING FORM OF INVESTMENT, ENTIRELY NEW in our field, which we nominate LACEY Profit-Sharing Bonds They extend to a public wider than our usual clientele the exact advantages (and all of them) which heretofore have accrued to the initiated few. It is our belief that they will be genuinely appreciated by many cautious investors who are indifferent to conventional offerings. The legitimate expectations are identical with those which in 37 years of business have governed similar transactions on a large scale of individual investment by the customers of James D. Lacey & Co. We respectfully refer those unacquainted with the meaning of the name of Lacey in timber finance, to any prominent lumberman or timber-owner in this country, and to any bank anywhere which has ever given attention to lumber and timber securities. You have read about the status, prospects and limitations of lumber at this date. Everything WOOD is a value rapidly and automatically enhancing. There never will be timber purchasing opportunities equaling the few which now, from time to time, become available. Some now in our control compare well with the more notable profit yielders of the past. (We pay no attention to properties ordinarily offered for public sale.) WE HAVE A BOOKLET ABOUT THE EXCEPTIONS AND THE NEW PLAN. YOUR NAME AND ADDRESS ON LETTERHEAD OR CARD WILL EVIDENCE YOUR ALERT AND INTELLIGENT INTEREST AND WILL IMPLY NO OBLIGATION WHATEVER. ASK US FOR THE FACTS ABOUT ISSUE T-214 LACEY TIMBER CO 332 South Michigan Avenue Chicago |